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Spain

Iberdrola: End of reign in Spain

27 November 2014
by Michael McGovern

WORLDWIDE: Iberdrola has expanded its global presence as growth in its home market has ground to a halt. The Spanish utility now has a healthy pipeline in the Americas and a number of large offshore projects.

Capacity boost… The 389MW West of Duddon Sands came online in October

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Iberdrola, Spain's top utility, with 14.13GW of wind capacity online globally, has been the world's leading wind operator for the best part of ten years. Its wind-power interests have soared from token stakes in its home market in the early 2000s to a major presence across Europe, Asia and the Americas with a significant interest in the growing offshore sector. The company claims a combined onshore/offshore pipeline of 60GW.

The turning point in renewables came in 2001 when current CEO Ignacio Galan, took the helm. His strategic plan made wind a mainstream option, and it now represents nearly one third (32%) of Iberdrola's 45.2GW generating capacity. Most of that capacity used turbines from Spain's Gamesa, in which Iberdrola's 20% stake makes it the largest shareholder.

The company is still coming to terms with the Spanish government's freeze on wind since 2012. Net profits for the first nine months of 2014 fell 19.5% year-on-year to EUR 1.83 billion, which Galan pinned mainly on the continued fallout. But pre-tax operation earnings rose by 49% in Mexico and 11% in the UK, reflecting Iberdrola's intensified international focus. As Galan pointed out earlier this year: "Right now, we are more British, American, Mexican or Brazilian than Spanish."

China fell off Iberdrola's radar last year, when it failed to consolidate 1GW of prospecting concession granted in 2006. The utility also closed offices in Tunisia, Egypt, Latvia and Slovakia.

Iberdrola's official outlook up to 2016, published in February 2014, expects 1.2GW of new wind capacity over that period, with the UK hosting the largest part at 432MW. Much of that has already been realised with October's inauguration of the 389MW West of Duddon Sands project in the Irish Sea. Jointly developed by Iberdrola's Scottish Power offshore subsidiary and Dong Energy, the project uses 3.6MW Siemens turbines.

Other offshore projects in the pipeline include the 1.2GW East Anglia One project in the UK, the first phase of a joint venture with Sweden's Vattenfall that could eventually total 7.2GW; the 100% Iberdrola-owned 350MW Wikinger project in Germany; and the 500MW Saint-Brieuc project off northern France, which is split 70/30 between Iberdrola and French developer Eole RES.

In October, Iberdrola finalised its latest wave of divestments in non-strategic wind markets to reduce debt and focus on key markets. The company sold 616MW of onshore wind across Poland, France and Germany. An earlier wave in 2012 saw EUR 850 million divestments in onshore wind stakes, mainly in Germany.